Keith, there's no way I can top your warm Winnipeg welcome and introduction
- it sure brings back marvelous memories about our families - the early years
- and life in this great city, not to mention our connection to Shad International,
commitment to community leadership and mutual interest in the extraordinary
value of human capital. But you're not off the hook yet I'll have more
to say about you in a couple of minutes!

First of all, it's always a treat to visit Winnipeg - I arrived on Sunday night
for a speaking engagement on Monday and have been making the familiar rounds
since then. The late Carol Shields once said: "Winnipeg is the optimum
size for a city. Some days I feel like I know everyone I meet downtown."
Well, I feel that way about Winnipeg too. And I particularly enjoy seeing Winnipeg
and Winnipeggers making leadership news and putting the city on the map - I
mean how many of us watched David Letterman's Late Show, just to see Dr. Gordon
Giesbrecht of the University of Manitoba (becoming widely known as "Professor
Popsicle"), submerge himself in a pool of ice water to show the effects
of cold on the human body?

Speaking of leadership in Winnipeg .I recall a comment that Christopher
Dafoe, columnist with the Winnipeg Free Press, made - believe it or not - in
1992 (I was working in the city at the time). He said: "When someone suggested
that "the new Canada" - if it even comes into being - might be wise
to select Winnipeg as its seat of government, a great hoot of laughter was heard
across the nation. Winnipeg! The very idea had them rolling in the aisles."
Christopher would likely agree that the tables have turned in Winnipeg's favour
thirteen years later. For example, a magnificent meeting place for human rights
leadership - the Canadian Museum for Human Rights - will be built in the geographic
centre of Canada. Talk about monumental news for WINnipeg, Canada and the world!
This brand of leadership, not only puts Winnipeg on the map again, it speaks
volumes about the importance of investing in human capital which brings
me to why I'm here.

When Keith invited me to talk about aligning people leadership with business
strategy - and integrating human capital issues, I remembered saving some good
material on this topic - one of the articles is an interview piece from the
web site workplace.ca. In part, it goes like this:

(Human resources - HR) "people need to understand and develop an appreciation
for the business they are in, to be able to contribute to that business' strategy.
It's not a matter of whether you can take your HR skills and practice them anywhere.
You need to be able to understand the dynamics of the business, of the marketplace,
the customers, the competitors and so forth, and contribute in terms that relate
to customers' needs, as opposed to simply a formula for an organizational structure
or system." Now those words likely ring a bell to someone in this room little
did Keith Sinclair know that I've kept track of his HR perspectives over the
years!

Let's take a closer look at the dynamics of people leadership and business
strategy for a few minutes, with a focus on research and stories revolving around
three critical human capital issues - leadership, diversity and talent management.
Then we can open up the forum to questions.

Research shows there's a direct link between an effective people strategy and
a company's competitive advantage. According to Watson Wyatt Worldwide's latest
Human Capital Index study, "a successful people strategy is not
merely linked to market value; it's a leading indicator of increased shareholder
value (and stakeholder value). This study demonstrated that high-performance
HR practices are key to attracting and maintaining top talent and improving
a company's productivity and profitability."

Duncan Brown, assistant director general of the Chartered Institute of Personnel
and Development in the UK says: "Any business that wants to compete successfully
needs to ensure that its work force has the right mix of people, with all their
skills and experiences, to fit the needs of its business. "HR is taking
on new importance as companies realize shareholder value is not what gets people
out of bed." Business, it appears, is coming to the HR function. But
the HR function is also going to the business being found in two words:
business partner." Some recruitment ads are sounding like this: "As
an HR business partner you'll be turning business objectives into people
plans, driving changes in organization and working practices and transforming
the way we deliver customer service." It's about aligning people leadership
with business strategy.

Hewlett-Packard's Gerard Brossard, vice president of global workforce planning
and management sums it up well: "The (executive) team pushed our business
groups to create a strategic workforce plan that aligned with their business
plan. I had to put my HR hat aside and work to understand the benefits it would
bring to the business groups. That was the key. I asked them specifically: "How
can we help you understand what the human capital implications of your business
strategy are going to be?" rather than just, "How can the businesses
help HR be more successful in its work?" My team then defined a workforce-planning
framework for the business groups to complete. The business groups now recognize
that HR contributes significant strategic value." Again, it's about aligning
people leadership with business strategy.

As you're aware, we're seeing a greater emphasis on the term human capital,
rather than human resources - the key difference being a much stronger focus
on "people leadership, development programs and initiatives that are linked
to business strategy, improved business performance and greater strength of
capability." In the article from Outlook Journal's October 2004 issue,
Making the Right Investments in People, the Accenture Institute for High
Performance Business analysis indicated that human capital strategy - aligning
people initiatives with overall business strategy - "drives important business
capabilities like workforce performance and employee engagement; these capabilities,
in turn, have a significant impact on key drivers of organizational performance
such as innovation."

So whether you're Darlene Ball of Ceridian Canada, Cindy Epp of Ernst &
Young, David Leschasin of St. Boniface General Hospital, Karen Milani of The
North West Company or Dennis Nord of Louis Riel School Division, aligning people
leadership with business/organizational strategy really matters to clients,
employees and stakeholders, to the entire operation and to ultimate success.

We've all heard about the importance of building a strong corporate culture,
establishing a strategic reward system, hiring the right people and the right
mix, staying armed re the "war for talent," creating sound policies
and practices and of course, developing a learning and development plan. The
differentiating factor every time is the alignment and integration of people
leadership and business strategy. Let's look at the importance and value of
diversity (a human capital issue) to illustrate this point by first positioning
the changing face of Canada:

Canada's overall population will grow 3.3% from 2001 - 2017. The visible
minority population will grow by 76% reaching 7.6MM.

13% of Canada's population are visible minorities and that will reach 21%
by 2017.

Top source countries for new immigrants are China, India, Pakistan and Korea
and top source countries for new business immigrants are China and Korea.
96% of new immigrants are destined for metropolitan areas.

What does this mean for people leadership strategies - diversity priorities
- or recruitment approaches? It means that we grow as individuals and as organizations
by respecting and leveraging our similarities and differences. It means that
by drawing on the resources of our businesses, markets and people, we generate
ideas and solutions that break new ground. And it means that we create more
productive workplaces, build an environment of inclusion, attract, retain and
engage talented women and men, gain a competitive advantage and provide superior
service to clients. In other words, it means we must work smarter to align people
leadership with business strategy.

Research also shows that investing in work/life leadership - building and embedding
a culture in the organization, through practices and resources, that helps all
employees better meet the competing demands of work and interests outside of
work, is a significant investment in human capital. And the launching pad is
a commitment to linking diversity and talent management - as "talent management
is about behaviour - the thoughts and actions that, consistently over time,
become organizational culture."

Today's executives are spending more time than ever before thinking about the
people side of their organizations. Yet how many of us can provide more than
a surface understanding of the return on human capital investment. Don't worry,
you're not alone. "A survey by CFO Research Services and Mercer Human Resource
Consulting (in 2003) found that companies, on average, spend 36 per cent of
their revenues on human capital expenses. But only 16 per cent (that's one in
six) of financial officers have more than a moderate understanding of the return
on that investment and 14 per cent said they had NO clue as to whether that
money was spent effectively."

What's the good news? "Senior executives and their teams are moving quickly
(or are being moved quickly) into roles of greater strategic responsibility.
Managing human capital is no longer the domain of HR professionals alone - it
must be a strategic responsibility for all leaders. All of us need to be engaged
by these (human capital) issues -- first in our own teams -- then working with
senior HR counterparts as strategic partners for the entire company (or organization).
From customer satisfaction to innovation to service delivery, the quality and
quantity of investment we make in our people has real consequences for almost
every aspect of business profitability."

RBC's Canadian and North American business strategy is founded on building
strong and lasting relationships with our clients - "earning the right
to be our clients' first choice" - and human capital is our greatest asset
in making this happen. Our new leadership model focuses on leading with integrity,
building enterprise excellence, working strategically and driving shareholder
value. It's also a model that pushes the envelope on alignment and integration.
The RBC value, "diversity for growth and innovation" makes
good business sense and is the right thing to do for employees, customers, communities
and shareholders alike. Our focus on work/life leadership and talent management
is about fostering a diverse workplace that builds employee capability and engagement
to help achieve business goals - more ways to align people leadership with business
strategy.

We know that diversity is a journey. We know that focus makes a difference.
And we know that integration, although challenging, increases the likelihood
of success - so changes in roles, capabilities and approaches are a constant.
Lead people. Manage things.

Our organization has invested heavily in leadership development over the years.
In the December 2004 Harvard Business Review article, "How to Grow Great
Leaders", Douglas Ready (author and President of the International Consortium
for Executive Development Research in Lexington, Massachusetts) chose RBC as
a case study. He says: "Despite the hundreds of millions of dollars invested,
the leadership development programs weren't producing leaders with the capacity
to manage the inherent tensions between unit and enterprise considerations.
That's because, as with most companies, RBC's leadership development efforts
were piecemeal, focused on particular skills and challenges, and therefore didn't
prepare employees to take on broader roles. Development was confined within
the organization's various silos. Every time a key position became available
in one of the company's platforms or functions, the only candidates offered
up were managers who had already worked in that area. So rising executives never
had a reason to venture outside their silos." Listen to our President and
CEO Gord Nixon's words, to discover how things are changing:

"You either believe that developing leaders is important or you don't.
There are so many variables that could be used to either make or break your
argument for leadership development. We are not going to play that game. We
firmly believe it's important to grow leaders who can run their businesses,
their functions, and their regions, yet who can lead with an enterprise-wide
perspective. People make this business happen, and we will let our performance
speak for the importance of developing leaders."

Ready goes on to make the following observation: "Competition has changed,
as have customers' expectations. Leadership development has not kept pace. Many
companies have created new organizational structures to accompany the need for
a broader perspective on the business, but the vast majority of leadership development
initiatives still take place in the very silos the organizations are trying
to transform. When people are trapped in business units, functions, or regions,
they're at risk of becoming prisoners of zero-sum thinking."

I can't stress enough how critical it is to align the human capital agenda
and related issues with business strategy. Although the "how to do this"
will be different in every organization, I can assure Linda Romsa of RBC, Eileen
Kirton of KWA Partners, Sherri West of Palliser Furniture, Alora Sinclair of
The Harris Consulting Group and John Ferris of Loewen - if only there was time
to mention all your names - that it starts with leadership at the top and that
ongoing success has a great deal to do with diversity and talent management.
Remember, a leader creates more leaders.

And this is why I'm pleased that Kirk Dudtschak joined us this morning - as
some of you are aware, Kirk is RBC's newly appointed Regional President for
Manitoba, Saskatchewan and northwestern Ontario, based in the city. He's definitely
the right leadership in Winnipeg!

In closing, special thanks to Keith Sinclair, Rick Klimczak of Ernst &
Young, Lori Fenn of the Human Resource Management Association of Manitoba (plus
a whole host of people I'm sure) for organizing this breakfast. Stephen Covey
has it right. "Leadership is a choice. Some people have natural gifts,
but all people have the natural potential the power lies in the choice."
The power lies with human capital!